From rejection to acceptance, Chanel also started to engage in e-commerce

Chanel, a luxury brand that has always been against e-commerce, has begun to "cautiously" touch the Internet and has made new attempts in e-commerce. It is reported that it will start selling eyewear products on US e-commerce platforms later this year. Bruno Pavlovsky, fashion president of Chanel, revealed at the end of March that Chanel will officially launch a global e-commerce network by the third or fourth quarter of 2016.

At the end of this year, three Metiers d'Art workshops of Paraffection, a subsidiary of Chanel (including glove workshop Causse, hat workshop Maison Michel and Scottish knitwear brand Barrie Knitwear) will open independent e-commerce channels.

Eyewear products will be Chanel's second attempt at e-commerce in the first half of this year. In April this year, Chanel cooperated with luxury shopping website Net-a-porter to open a sales area for its high-end jewelry series CocoCrush, which is priced between 1,970 and 19,000 euros. It was reported that it was sold out after only 6 hours of sale.

This may have strengthened Chanel's confidence in opening up e-commerce. Previously, Chanel was a typical representative of luxury brands that resolutely rejected e-commerce. Bruno Pavlovsky once said when explaining why Chanel did not start online sales of accessories and ready-to-wear, "Fashion needs people to see, touch, feel and understand."

However, Chanel has already started preparing for e-commerce at the beginning of this year. In February, Chanel announced to coordinate pricing in global markets, which was a disguised way of reducing prices in Asian markets such as China and South Korea, while product prices in the Eurozone rose sharply by 20%. Bruno Pavlovsky pointed out at the time that the new pricing strategy would help the brand take a step towards online sales, "One day we may sell online."

Chanel's accelerated move towards e-commerce may indicate that the luxury industry, which has always adhered to the traditional model, cannot resist the Internet wave. In the period of slow growth in the industry, e-commerce channels have become a vital part of luxury goods. However, opening up e-commerce is not just as simple as adding channels. Luxury brands' traditional storytelling and customer experience management will face various challenges from the Internet.

From rejection to embrace

Why were luxury brands so reluctant to buy e-commerce before?

Professor Michel Gutsazt, international brand management expert and vice president of KEDGE Business School in France, said in an exclusive interview with the reporter of China Business News at the "Internet + Era China High-end Brand Building Road and EMBA Private Board Open Class" that, on the one hand, luxury brands believe that consumers can only feel the intricate workmanship of boutique fashion and luggage through touch, and only in physical stores can consumers enjoy their unique tailoring and clothing matching services; secondly, they believe that the entry point of e-commerce is price, and luxury brands are unwilling to lower their prices and image; thirdly, they are worried about the existence of counterfeits on the Internet.

However, Bruno Pavlovsky gradually realized that e-commerce platforms are an effective way for customers to learn about new products. Customers need to quickly learn about the latest product trends, and this service will ultimately benefit the brand. He said that Chanel plans to adjust prices globally starting with the release of its 2016 resort series to coincide with the launch of its e-commerce platform.

Many other luxury brands have also started the e-commerce process. At the end of 2010, Giorgio Armani announced the launch of an e-commerce channel in China, emporioarmani.cn, becoming the first high-end fashion brand to launch an online store in China. This spring, Fendi will also launch an e-commerce website, although in the early days it only provides delivery services to 28 European countries.

In order to capture Chinese consumers, luxury brands' e-commerce, new media and digital marketing seem to be more urgent. Studies have shown that in fast-growing markets such as China, India, Turkey and Latin America, the customer groups with purchasing power are more than ten years younger than those in developed markets. These young customers generally own smart devices and prefer digital technology.

"No world-class luxury brand can be absent from the e-commerce market," said Mario Ortelli, senior analyst at Bernstein Research. He predicts that in the next five to ten years, e-commerce channels will account for more than 15% of total luxury goods sales, mainly driven by emerging markets where young, wealthy consumers will be digital elites.

Tactics of luxury brands in the “Internet +” era

"The Internet has become one of the challenges for luxury brands." Wang Depei, vice president of the China Economic System Reform Research Association and chief researcher of Foka Think Tank, previously stated that in the medium and long term, the Internet will allow top brands to return to their true nature. Brands must make their value and taste truly felt by consumers, rather than just selling general goods online.

Li Wei, CEO and partner of Very Creative Shanghai, believes that in the Internet era, luxury brands should embrace business changes and truly abandon traditional storytelling and experience models, be bold in innovation, and provide consumers with a brand new brand experience.

For example, consumers’ information contact points have changed, and are often on Internet platforms. Therefore, high-end brands must also begin to use these channels and the interactive features of the Internet itself to tell their own stories.

One example is that LV has product lines such as bags and watches, but the core of the brand is travel and suitcases. Many communication activities and information of LV’s digital advertising revolve around such points. For example, communicating with consumers how to pack suitcases elegantly, using this method to tell the brand story.

For example, in the past, luxury brands provided consumers with a special customer experience through luxuriously decorated stores and meticulous and thoughtful services. However, in the Internet era, luxury brands may have to consider how to use digital technology to provide customers with a special consumption experience.

Burberry's digital strategy is considered to be leading in the luxury industry. While other luxury brands are still hesitating and watching new media and digital strategies, it is also one of the earliest luxury brands to get involved in e-commerce and new media marketing and profit from it.

In 2013, its application "BurberryKisses" in cooperation with search giant Google was considered a successful attempt to bind customers by realizing personalized emotional appeals and connecting the brand and consumers more closely. In its latest flagship store in Shanghai, Burberry also tried out radio frequency identification technology (RFID) for the first time. By implanting digital chips in specific clothing and accessories, multimedia content related to the product can be displayed to customers, giving consumers a fresh shopping experience. It is reported that Burberry's investment in digital technology even exceeds 60% of its marketing budget.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.